In Manila, Philippines, urban poverty can be directly linked to high rates of attrition in high schools, where students from low-income families drop out of school early to start working to support the family. Solutions to tackle the root cause of poverty within these urban poor communities are needed to reduce financial pressures on parents and reduce any reliance on their children contributing to household incomes. In a joint project that aimed to increase income for urban poor families through unique social business opportunities, Dana Asia partnered with Telstra Foundation Philippines (TFP) and Grameen Pilipinas Microfinance Inc (GPMI) (then Grameen Australia Philippines), to create a positive, lasting impact with the most marginalised urban poor communities. This type of project – that directly correlated family livelihood development with high school attendance – was a first in the Philippines and ran from May 2016 until December 2019.
The project’s main objectives were to facilitate community-driven social business through microfinance and training as income generation for parents of at-risk students, reducing the risk of attrition. GPMI first facilitated microfinance to enterprising parents in the two target communities. Microfinance was used by microentrepreneurs to create home and community-based microbusinesses in retailing, manufacturing and engage-in services. Parents were organised into a Parents’ Co-operative to manage the microfinance, open savings accounts and take annual life insurance. A total of PHP 2.43 million (A$67,000) was disbursed to enterprising parents to facilitate the setup of 200 retail businesses, 18 manufacturing businesses and 58 engage-in services. Their business activity resulted in increased income levels, reducing financial pressures on parents and enabling them to increase the support for their children’s education. The additional income from these small businesses led to a 12% average increase in family income, which allowed families to start weekly savings and hold life insurance policies. The reduced pressure on family finances had a direct positive effect on the rates of school participation of those children whose parents took part in the project.
The Entrepreneurship program was implemented through hands-on skills training for both parents and students, in collaboration with partner experts from local NGOs and academe. Training was delivered in basic cosmetology, sewing and bread-making skills, to facilitate the setting up of small business start-ups. Dana Asia’s training partner, De La Salle University, trained 268 senior high school students in sewing, baking and food service to equip them with practical skills for employment. Students then embedded those skills through hands-on work experience, working in the school’s Café Lab. The students achieved passing marks in their chosen vocational track and gained skills to broaden their entrepreneurial potential in the post-secondary track. Working with partner Hortaleza, 32 parents were trained in basic cosmetology and, upon completion of training, graduates were given a beautician’s kit with items needed to start their home-based wellness services.
Through microfinance and skills training, several social business initiatives utilising the community and school’s resources were developed, with able support from NGO and academia partners. Training in basic cosmetology led to the set-up of several home-based wellness services. Those parents trained in bread-making used microfinance to purchase capital to start small-scale home baking businesses. One Sewing Laboratory and two Café Labs were established as social businesses to generate income for the school and provide further hands-on learning for students, also serving as a centre for parents’ training-cum-production of eco-bags and rags. The Café Lab served as a venue for the student’s vocational training as well as a market outlet for products baked by students, as well as income generation for the parent-suppliers of homemade snacks.
By the end of the funding period, the project saw an increase in high school student participation, up from 85% to 97%. Parents earning more money felt less pressure for their children to start working to contribute to family finances and were better able to support their child’s education. The project enjoyed the achievement of its objectives and gained recognition at a government level for its innovations. The Pasay City Department of Education has advocated for the replication of the Café Lab concept in other secondary schools and initial discussions were held, but the COVID-19 pandemic has put a temporary hold on replication until schools return to normal operation.
For project continuity and sustainability, a total of PHP 2.73 million (A$75,000) was collected in recycled funds, which will be used to subsidise the project’s continuity, and for replication in new sites. The project’s mission in the two pilot communities will be sustained through continuing microfinance to enterprising individuals, and the Café Lab social business has been turned over to the school for its continued operation as an entrepreneurial hub for students.